Second Circuit Issues Notable Decision Defining Victim and Loss Under the Sentencing Guidelines

Adding to a series of notable decisions addressing the calculation of loss under the Sentencing Guidelines, see here, here and here, the Second Circuit has ruled in United States v. Abiodun, 2008 WL 2924341 (2d Cir. July 30, 2008), that “lost time” – to the extent it can be measured in monetary terms – is “actual loss” under U.S.S.G. § 2B1.1(b)(1), and thus, individuals who have incurred lost time due to a theft or a fraud offense are “victims” under U.S.S.G. § 2B1.1(b)(2).  The decision means some significant increases in sentencing ranges calculated in theft and fraud cases, not to mention, a logistical hornet’s nest for sentencing courts trying to calculate this kind of loss for sentencing and restitution purposes.

Facts

Abiodun pled guilty to credit card fraud arising out of his purchase of between 300 and 400 stolen credit reports, and, on appeal, challenged the district court’s determination that his criminal activity involved more than 250 victims, resulting in a six level enhancement of his guideline level.  He argued that individuals whose identities were stolen but who were fully reimbursed for their financial losses cannot be deemed victims.  The district court, however, disagreed, finding that the victims affected by Abiodun’s crimes included “individuals who had spent an appreciable amount of time securing reimbursement for their financial losses from their banks or credit card companies.”

Holding

Rejecting the challenge, and adopting conclusions reached by the Sixth and Eleventh Circuits, the Court held that “individuals who are ultimately reimbursed by their banks or credit card companies can be considered ‘victims’ of a theft or fraud offense for purposes of U.S.S.G. § 2B1.1(b)(2) if – as a practical matter – they suffered (1) an adverse effect (2) as a result of the defendant’s conduct that (3) can be measured in monetary terms.”

Comment

Leaving aside the practical difficulties presented by this decision (while amounts actually stolen and not reimbursed are usually easily established and verified, “lost time” is a far more elastic and subjective concept), the Court’s holding in Abiodun could lead to increased adjusted offense levels in many fraud and theft cases – not least Abiodun’s own case.  Pointing out that the district court’s correct conclusion regarding the number of victims necessarily impacted its loss determination in that case, which did not include a calculation of lost time, the Court remanded Abiodun's case for resentencing, so that the district court could “(1) recalculate the loss amount associated with each of the defendants’ crimes to include the time lost by these potential victims or (2) determine whether, if these individuals are excluded from the count, it is still ‘more likely than not’ that Abiodun’s crimes affected ‘250-plus victims.’”